In its fifth major decision in five days, the Board overruled a 2016 decision that limited what changes to terms and conditions of employment that an employer can make without bargaining. In so doing, the Board returned to a broader view of what it means to maintain the “status quo.” In Raytheon Network Centric Systems, 365 NLRB No. 161 (Dec. 15, 2017), the Board held that employers do not need to bargain when “the employer takes actions that are not materially different from what it has done in the past.” In Raytheon, that meant the employer lawfully modified employee medical benefit plans after the CBA expired because the employer had made similar modifications annually for 11 years.
Late Friday evening, the NLRB overruled Specialty Healthcare & Rehabilitation Center of Mobile, 357 NLRB 934 (2011), the decision that permitted unions to organize “micro-units” of employees. In PCC Structurals, Inc., 365 NLRB No. 160, the Board returned to “the traditional community of interest standard” for evaluating the appropriateness of a petitioned-for bargaining unit.
Today, the NLRB issued two landmark cases reversing precedent on the Board’s test for work rules and joint employment. In The Boeing Company, 365 NLRB No. 154, the Board reversed a 2004 decision that prior Boards used to find unlawful “a large number of common-sense work rules and requirements that most people would reasonably expect every employer to maintain.” In Hy-Brand Industrial Contractors, Ltd., 365 NLRB No. 156, the Board overruled the Browning-Ferris joint-employment test and returned to requiring direct control over essential terms and conditions of employment before it will find joint employment status.
On Monday, December 11, 2017, the Board issued a decision holding that Administrative Law Judges can approve an employer’s offer to settle unfair labor practice charges so long as the settlement offer is “reasonable,” even if the general counsel and charging party object to the settlement. The case reverses Obama-era precedent that held that an ALJ can approve a settlement only if the settlement provides “complete relief” for every alleged unfair labor practice. That standard made it impractical for employers to settle unfair labor practice charges because employers received no compromise in exchange for foregoing full-blown litigation.
The newly-appointed NLRB General Counsel Peter Robb issued his list of priorities in Advice Memo 18-02 released December 4, 2017. The Memo sets forth the “Mandatory Submissions to Advice” – the kinds of cases Regional Directors must submit to the Division of Advice to obtain guidance before issuing a complaint. The Advice Memo signals the GC’s intent to assist the Board in undoing much of the Obama-era Board’s sweeping changes to federal labor law. As predicted, many of the priorities focus on the Board’s handbook-related changes, granting employee access to employer email systems, and confidentiality rules in investigations.
On October 10, Local 100, United Labor Unions filed an unfair labor practice charge against the Dallas Cowboys claiming that it unlawfully threatened players to prevent them from engaged in protected concerted activity. Earlier this week, Cowboys’ general manager Jerry Jones threatened to bench players who refused to stand for the national anthem.
The charge highlights how simple it is for literally anyone on the street to file an unfair labor practice (“ULP”) charge. Local 100 does not represent the players—the National Football League Players Association does. But anyone can file a ULP charge—the NLRB requires no standing.
The charge also raises the interesting question of whether kneeling for the national anthem constitutes concerted activity protected by the NLRA, even under the NLRB’s currently broad standards. The NLRA protects “concerted activities for the purpose of collective bargaining or other mutual aid or protection,” but only as it relates to terms and conditions of employment. Protesting social and racial injustice, broadly speaking, does not relate to the players’ working conditions, particularly where none of the players have claimed poor treatment by the NFL or their teams. But if players kneel to support other players (such as Colin Kaepernick) or to protest Jones’s new rule, such conduct could earn the protection of the Act.
On October 3, 2017, California Governor Jerry Brown signed into law Senate Bill 306, dramatically limiting an employer’s right to defend itself against allegations that it retaliated against an employee for making wage claims. In short, the law makes it far easier for employees and the California Labor Commissioner to obtain injunctive relief in retaliation cases, potentially requiring employers to reinstate discharged employees before an employer can fully defend itself against the allegations. The law takes effect January 1, 2018.
The law allows the Labor Commissioner or an employee to obtain injunctive relief against an employer based on a mere showing that “reasonable cause exists to believe a violation has occurred.” That’s a far lower burden of proof than a court’s typical standard for injunctive relief, which requires a showing that (1) the employee will suffer irreparable harm, (2) the employee will likely succeed on the merits, and (3) the employee’s interests outweigh the employer’s. The law also requires a court considering a request for an injunction to evaluate “the chilling effect on other employees.”
Other features of the new law that restrict employers’ rights include:
- Authorizing the Labor Commissioner to seek injunctive relief before concluding its own investigation;
- Permitting the Labor Commissioner to initiate investigations on its own, “without a complaint,” if the suspected retaliation occurred during the adjudication of a wage claim or a field inspection, or in instances of immigration-related threats;
- Allowing the Labor Commissioner to issue its own citations ordering reinstatement or back pay, without going to court;
- Placing a heavy burden on the employer to challenge Labor Commissioner citations, including requiring the employer to post a bond equal to the total amount of back pay allegedly owed.
Key Takeaways: The new law increases the need for California employers to make careful, well-reasoned, and thoroughly-documented disciplinary and discharge decisions. Notably, when employees make wage claims, they often also simultaneously engage in protected concerted activity under Section 7 of the NLRA. Given the potential overlap between the Labor Commissioner’s jurisdiction and the NLRB’s jurisdiction, employers facing legal action under the new law should consider whether an NLRA preemption defense applies.
On September 28, 2017, the Supreme Court agreed to review whether service advisors at auto dealerships qualify as exempt from overtime under the Fair Labor Standards Act, in Encino Motorcars, LLC v. Navarro. The employer’s petition asks the Court to overturn the Ninth Circuit’s decision that the employees who advise customers about repair work could continue their wage-hour lawsuit against a California Mercedes Benz dealership. A Supreme Court decision could have wide-ranging impact on how lower courts interpret exemptions under the FLSA. (We’ve previously written about misclassification issues here.)
The Court also agreed to rehear the issue of whether requiring non-union employees in the public sector to pay fees to unions violates their First Amendment rights, in Janus v. AFSCME, Council 31. The petitioners seek to overturn the Court’s 1997 decision in Abood v. Detroit Board of Education, which affirmed that unions can require fees from non-members to cover costs of collective bargaining, contract administration, and grievance handling. The Court reheard the issue in March 2016 shortly after Justice Scalia’s death, but the case ended in a 4-4 tie. Newly-appointed Justice Gorsuch is expected to provide the clinch vote to ban to fees.
In related news, the Court will hear oral argument on Monday, October 2, 2017, in the consolidated cases asking whether arbitration agreements that bar employees from pursuing class or collective action claims violate Section 8(a)(1) of the NLRA.
On September 25, the Senate confirmed William Emanuel to the National Labor Relations Board by a vote of 49-47. With Emanuel’s confirmation, and the Senate’s recent confirmation of Republican Marvin Kaplan, the Board now has its full five-members and a Republican majority, which it has not had since before the Obama administration. Along with Kaplan, Emanuel joins Republican Chairman Philip Miscimarra and Democratic members Mark Gaston Pearce and Lauren McFerran.
A veteran management-side attorney with Littler Mendelson, Emanuel has significant experience representing employers before the Board. His previous clients include companies in the transportation, banking, automotive, and healthcare industries. Just before the vote, Senate Majority Leader Mitch McConnell (R-KY) tweeted: “The @NLRB is supposed to be a neutral umpire in labor disputes. It’s time it got back to that. Confirming Mr. Emanuel today will help do so.” Senator Dean Heller (R-NV) stated that he was encouraged that the Board has a new majority for the first time in nearly a decade and that “it will be instrumental in making balanced decisions that will help boost our economy and create jobs . . . around the country.” Senate Democrats, including Elizabeth Warren (D-MA), were less enthusiastic. Warren expressed concerns that Emanuel should not serve on the Board after spending his lengthy career trying to prevent workers from unionizing.
Various business groups supported President Trump’s nomination of Emanuel and praised his ultimate confirmation. National Retail Federation Senior Vice President for Government Relations David French previously urged the Senate to promptly confirm Emanuel, noting that retailers were confident that he would be a “fair arbiter of the law.” Competitive Enterprise Institute labor policy expert Trey Kovacs stated that Emanuel would be an outstanding addition to the Board. Kovacs added, “It’s essential that the NLRB start to undo the harm caused during the Obama administration, when the board put out numerous job-killing decisions and rules that weaken worker choice.”
While the Republicans have a 3-2 majority, and with Chairman Miscimarra’s term coming to an end in December 2017, look for the Board to soon revisit previous high profile Board decisions that placed significant burdens on employers, including such issues as the joint employer standard, micro-bargaining units, and employer handbooks and policies, as well as possibly rescinding speedy election rules.
Two Board cases decided September 7 shed light on how the Board handles alleged breaches of informal settlement agreements and the “default language”[i] that Regions often put in those settlement agreements — ConAgra Foods and Outokumpu Stainless. In particular, Miscimarra’s separate opinions in these cases signal that the Trump Board may hold the Regions more closely to the precise terms of the settlement agreements, and hopefully push back on Regions who have made it difficult for employers to reach informal settlements in recent years.